Main findings

UK house prices increased by 9.6% in the year to March 2015, up from 7.4% in the year to February 2015.

House price annual inflation was 9.4% in England, 5.7% in Wales, 14.6% in Scotland and 7.5% in Northern Ireland. This is the highest annual increase in Scotland since July 2007.

The pace of annual house price growth increased across the majority of the UK.

Annual house price increases in England were driven by an annual increase in the East (11.4%), London (11.2%) and the South East (11.2%).

Excluding London and the South East, UK house prices increased by 8.1% in the 12 months to March 2015.

On a seasonally adjusted basis, average house prices increased by 1.1% between February and March 2015.

In March 2015, prices paid by first-time buyers were 7.8% higher on average than in March 2014. For owner-occupiers (existing owners), prices increased by 10.3% for the same period.

About this statistical bulletin

The Office for National Statistics (ONS) House Price Index (HPI), previously published by the Department for Communities and Local Government (DCLG), is a monthly release that publishes figures for mix-adjusted average house prices and house price indices for the UK, its component countries and regions.

The index is calculated using mortgage financed transactions that are collected via the regulated mortgage survey by the Council of Mortgage Lenders. These cover the majority of mortgage lenders in the UK. The HPI complements other measures of inflation published by us such as the consumer price indices, the producer price indices and the services producer price indices.

This statistical bulletin provides comprehensive information on the change in house prices on a monthly and annual basis. It also includes analysis by country, region, type of buyer (first-time buyers and former owner-occupiers) and type of dwelling (new dwelling or pre-owned dwelling). Historical series for all accompanying tables that transferred from DCLG are also available in the data section of this release.

The figures published in this release are not seasonally adjusted unless otherwise stated.

House price index UK summary

UK average house prices increased by 9.6% over the year to March 2015, up from an increase of 7.4% in the year to February 2015 (Figure 1). This is the first increase in the pace of annual UK house price inflation since September 2014. The average UK mix-adjusted house price in March 2015 was £273,000.

Figure 1: Annual house price rates of change, UK all dwellings from January 2004 to March 2015

12 month percentage change

Source: Office for National Statistics

Notes:

Not seasonally adjusted.

Data collected via the regulated mortgage survey.

Download chart

In March 2015, the UK mix-adjusted house price index increased to a record level of 209.7 (Figure 2). This is 1.0% higher than the record level witnessed in August 2014, when the index reached 207.7 and 13.0% higher than the pre-economic downturn peak of 185.5 in January 2008.

Figure 2: Index values, UK all dwellings from January 2004 to March 2015

Index values February 2002=100

Notes:

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On a seasonally adjusted basis, average house prices increased by 1.1% between February and March 2015, compared to a fall of 0.8% in average prices during the same period a year earlier.

Table A: house price index - summary of UK all dwellings, March 2015

Index - February 2002=100

house price index: UK all dwellings

Index

Percentage 12 month change

Index

Percentage monthly change

£

NSA

NSA

SA

SA

NSA

2013

Jan

179.2

2.1

178.8

-0.6

237,000

Feb

176.1

1.9

178.6

-0.1

233,000

Mar

177.3

2.7

179.8

0.6

235,000

Apr

179.7

2.6

180.2

0.2

238,000

May

180.2

2.9

180.9

0.4

239,000

Jun

182.5

3.1

181.8

0.5

242,000

Jul

185.0

3.3

182.1

0.2

245,000

Aug

185.9

3.7

183.1

0.5

246,000

Sep

185.0

3.8

183.7

0.3

245,000

Oct

186.4

5.5

186.6

1.7

247,000

Nov

187.2

5.4

187.7

0.6

248,000

Dec

188.5

5.5

189.6

0.9

250,000

2014

Jan

191.3

6.8

191.1

1.0

252,000

Feb

192.2

9.2

194.8

1.8

253,000

Mar

191.4

8.0

193.6

R

-0.8

R

252,000

Apr

197.5

9.9

197.7

R

2.1

260,000

May

198.9

10.4

199.4

R

0.9

262,000

Jun

201.2

10.2

200.5

0.6

R

265,000

Jul

206.2

11.5

203.2

R

1.4

272,000

Aug

207.7

11.7

204.8

0.8

274,000

Sep

207.3

12.1

205.8

0.5

273,000

Oct

205.8

10.4

206.1

0.1

271,000

Nov

205.7

9.9

206.5

R

0.2

R

271,000

Dec

206.9

9.8

208.0

R

0.7

272,000

2015

Jan

R

207.4

8.4

207.7

R

-0.1

270,000

R

Feb

R

206.5

7.4

209.5

R

0.9

R

269,000

R

Mar

209.7

9.6

211.8

1.1

273,000

Table source: Office for National Statistics

Table notes:

Average house prices are not comparable between years as they reflect a different mix of houses being transacted. Indices have been chain linked so they are comparable year-on-year. For more information please see the re-weighting section in the background notes.

SA = Seasonally adjusted.

NSA = Not seasonally adjusted.

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House price index by country

During the year to March 2015, average house prices increased 9.4% in England (up from 7.7 in the year to February 2015), 5.7% in Wales (up from 1.4%), 14.6% in Scotland (up from 5.3%) and 7.5% in Northern Ireland (down from 14.7%).

This is the highest annual increase in Scotland house prices since July 2007 (Figure 3). The number of mortgages for house sales in Scotland increased by approximately 50% between February and March 2015. A significant proportion of this increase in sales was for houses costing more than £500,000. These factors, along with a relatively small annual increase in Scotland prices of 0.8% in March 2014, have led to the price index for Scotland increasing by 14.6% when compared to a year earlier. It should also be noted that the land and buildings transaction tax replaced UK stamp duty land tax in Scotland from 1 April 2015, which may have had an impact on the increase in prices.

Figure 3: All dwellings annual house price rates of change by country, January 2004 to March 2015

12 month percentage change

Source: Office for National Statistics

Notes:

Not seasonally adjusted.

Data collected via the regulated mortgage survey.

Please click on the image to view a larger version.

Download chart

In March 2015, the England and Scotland house price indices increased to record levels (Figure 4).

The index for England reached 207.0 in March 2015. This is 0.8% above the the previous record level witnessed in August 2014 (205.3) and 14.5% higher than the pre-economic downturn peak in January 2008 of 180.8. The index for Scotland (243.2) in March 2015 is 3.5% above the previous record level witnessed in August 2014 (234.9). Scotland prices are now 5.5% above the pre-economic downturn peak of June 2008 (230.6). The index for Wales (223.1) in March 2015 is 0.7% below the record level of 224.6 in January 2015. However, house prices in Wales are 0.5% higher than the pre-economic downturn peak of January 2008 (222.1). The index for Northern Ireland (152.7) in March 2015 is 45.8% below the peak of August 2007 (281.5).

Figure 4: Mix-adjusted house price index by UK countries from January 2004 to March 2015

Index level (Feb 2002=100)

Source: Office for National Statistics

Notes:

Not seasonally adjusted.

Data collected via the regulated mortgage survey.

Please click on the image to view a larger version.

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House price index by region

The pace of annual house price growth picked up across the majority of the 9 English regions (Figure 5). The largest annual increase was in the East at 11.4% (up from 11.2% in the year to February 2015) followed by London (11.2% increase in the year to March 2015, up from 9.1%) and the South East (11.2% increase in the year to March 2015, up from 8.5%). The lowest growth in March 2015 was in Yorkshire and The Humber; here prices increased by 4.4% over the year. Excluding London and the South East, UK house prices increased by 8.1% over the year to March 2015, up from 6.1% in the year to February 2015.

Figure 5: All dwellings annual house price rates of change: UK, country and regions

12 month percentage change for March 2015

Source: Office for National Statistics

Notes:

Not seasonally adjusted.

Data collected via the regulated mortgage survey.

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This month, a number of English regions have seen house prices increase to record levels (Figure 6).

The price index for the East of England reached a record level of 193.3 in March 2015. This is up 0.7% from the previous record in February 2015 (192.0) and 14.8% higher than the pre-economic downturn peak in January 2008 (168.4). The price index for the East Midlands reached a joint record level of 198.1 in March 2015 (along with August 2014). The price index for the East Midlands is 2.4% higher than the pre-economic downturn peak in January 2008 (193.5). The price index for the West Midlands reached a record level of 191.3 in March 2015. This is up 0.8% from the previous record in December 2014 (189.7) and 3.2% higher than the pre-economic downturn peak in October 2007 (185.4). The price index for the South East reached a record level of 191.3 in March 2015. This is up 1.1% from the previous record in December 2014 (189.2) and 14.9% higher than the pre-economic downturn peak in January 2008 (166.5). The price index for the South West reached a record level of 188.4 in March 2015. This is up 0.1% from the previous record in January 2015 (188.2) and 4.3% higher than the pre-economic downturn peak in October 2007 (180.7).

The price index for London is now 0.6% below the record level of 243.5 in August 2014 with an index of 242.1 in March 2015. However, the London index is 38.7% higher than the pre-economic downturn peak in January 2008 (174.5).

Figure 6: Mix-adjusted house price index by selected regions from January 2004 to March 2015

Notes:

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Average house prices in countries and regions

Average mix-adjusted house prices in March 2015 stood at £284,000 in England, £173,000 in Wales, £145,000 in Northern Ireland and £207,000 in Scotland (Figure 7).

In March 2015, London continued to be the English region with the highest average house price at £498,000 and the North East had the lowest average house price at £157,000. London, the South East and the East all had prices higher than the UK average price of £273,000.

Excluding London and the South East, the average UK mix-adjusted house price was £211,000.

Figure 7: Mix-adjusted average house price: UK, country and region

House Prices for March 2015

Source: Office for National Statistics

Notes:

Not seasonally adjusted.

Data collected via the regulated mortgage survey.

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House price index by type of buyer

The average price for properties bought by first-time buyers increased by 7.8% over the year to March 2015, up from an increase of 6.8% in February 2015 (Figure 8). In March 2015, the average price paid for a house by a first-time buyer was £206,000.

The average price for properties bought by former owner-occupiers (existing owners) increased by 10.3% in the year to March 2015, up from an increase of 7.7% in February 2015. In March 2015, the average price paid for a house by a former owner-occupier was £319,000.

Figure 8: UK annual house price rates of change by type of buyer, January 2004 to March 2015

12 month percentage change

Source: Office for National Statistics

Notes:

Not seasonally adjusted.

Data collected via the regulated mortgage survey.

Download chart

House price index by new and pre-owned dwellings

During the year to March 2015, prices paid for new dwellings increased by 13.6% on average, compared with an increase of 2.8% in the year to February 2015 (Figure 9). The average UK house price for new dwellings in March 2015 was £274,000.

During the year to March 2015, prices paid for pre-owned dwellings increased by 9.2% on average, compared with an increase of 7.7% in the year to February 2015. The average UK house price for pre-owned dwellings in March 2015 was £273,000.

Figure 9 : UK annual house price rates of change by type of dwelling, January 2004 to March 2015

12 month percentage change

Source: Office for National Statistics

Notes:

Not seasonally adjusted.

Data collected via the regulated mortgage survey.

Download chart

Data tables

The HPI monthly and quarterly reference table (3.59 Mb Excel sheet)
provides full historical series for the monthly tables accompanying the house price index statistical bulletin. This month, tables 1 to 9 have been updated with the latest monthly estimates for March 2015. The seasonally adjusted figures in Table 7 have been revised this month as scheduled. This month, tables 10 to 19 have been updated with the latest data for the first quarter of 2015.

The HPI weights summary (79.5 Kb Excel sheet)
reference table provides a summary of the aggregated mix-adjustment weights used in the production of the HPI for the period 2011 to 2015. The mix-adjustment weights are updated in the February HPI each year.

Annual house price statistics for small areas

We published annual house price statistics for small areas alongside the December 2014 HPI, covering the period 1995 to 2013. This dataset will be updated to include 2014 data alongside the April 2015 HPI, to be published on Tuesday 16 June 2015.

How are we doing?

We would welcome your views on the data presented in this statistical bulletin. Please contact the house price index team using the email address below to discuss any aspect of the data, including your views on how we can improve the data.

January and February 2015 data have been revised this month to incorporate transactions from those lenders that provide data on a quarterly basis. There are small revisions to the seasonally adjusted series for the last 12 months, which are expected from the monthly seasonal adjustment process.

Revisions next month

No revisions are expected for the April 2015 HPI, apart from the normal revisions to the latest 12 months that follow the monthly seasonal adjustment process.

Relevance of the ONS House Price Index

The ONS HPI is an important measure of house price inflation for the UK and together with the Land Registry HPI, it is one of the main house price indices used by central and local government to support decision making in the UK. Other users include private individuals, surveyors and analysts in financial institutions.

The ONS HPI is also an important input into the housing cost component of RPIJ and RPI retail price indices. Each month a customised HPI delivery is produced using a sub-sample of the full data set for use in RPIJ and RPI.

Revisions policy

At the end of every quarter, as well as releasing final figures for the latest month, we revise the figures from the previous 2 months. This is done because some mortgage lenders, which account for 1 to 2% of all records, provide their data on a quarterly rather than monthly basis. Additionally, data will be revised for the previous month if more than 1,000 additional cases are received in a subsequent month.

In July 2013, the methodology used to seasonally adjust the HPI was updated following a review and brings the HPI in line with our best practice for seasonal adjustment. Seasonal factors are now estimated on a monthly basis and therefore may result in small revisions to the previous 12 months data. This updated process improves the accuracy of the seasonally adjusted figures.

Other revisions to historical data (other than those currently due for revision) will be made only if the revision is substantial.

In all cases, the revised figures are labelled with a 'R' and the reason for the revision explained under the 'New this month' section of the background notes.

Methodology

Data sources

Since October 2005 the ONS HPI (formerly the DCLG HPI) has been based on a sample of mortgage completions data from the Regulated Mortgage Survey (RMS) as collected by the Council of Mortgage Lenders (CML).

The number of transactions received from the RMS is affected by the total number of mortgages completed for house purchase in any period. During 2011 the sample covered 65-70% of all UK mortgage completions.

The ONS HPI is mix-adjusted to allow for differences between houses sold (for example type, number of rooms, location) in different months within a year. House prices are modelled using a combination of characteristics to produce a model containing around 100,000 cells (one such cell could be first-time buyer, old dwelling, one bedroom flat purchased in London). Each month estimated prices for all cells are produced by the model and then combined with their appropriate weight to produce mix-adjusted average prices. The index values are based on growth rates in the mix-adjusted average house prices and are annually chain linked. More information on the model used is available via the hedonic model methodology paper (246.4 Kb Pdf)
published on the HPI user guidance webpage.

Re-weighting

The ONS HPI is a weighted Laspeyres-type index. In January of each year the index weights are updated based on the relative numbers of transactions during the previous three years, which are grossed to total transactions obtained from Land Registry. Applying new weights ensures that the index keeps up to date with changes in the types of properties that are being purchased, and therefore reflects the price of the average property. A high level summary of the weights used in the calculation of the ONS HPI can be found in the HPI weights summary reference table (74 Kb Excel sheet)
.

One consequence of changing the weights every year is that the mix-adjusted house prices cannot be compared between years as the weights are different. The index itself is constructed on a chain-linked basis, which enables year-on-year comparisons to be made. This means that the year-on-year change in the index for June 2011, say, is effectively the change in the average price from June to January 2011 (using the weights for 2010) combined with the change in the average price from January to June 2011 using the weights for 2011. Therefore, the year-on-year change in the index is not the same as the year-on-year change in the mix-adjusted average price. More information on the HPI methodology is available on the GOV.UK website.

Seasonal adjustment

The housing market shows seasonal effects that affect house prices. For example, prices have tended to be higher during the summer months than during the winter months. These seasonal effects are estimated and adjusted for in order to calculate month-on-month price changes. Seasonally adjusted figures are provided at a national level in Table 7 alongside the non-seasonally adjusted figures of the other tables. Seasonal adjustment is performed each month and reviewed each year, using the standard and widely used software X-13-ARIMA. Seasonally adjusted house price estimates are used to report monthly percentage changes. All other figures such as annual rates of change and average house prices are based on non-seasonally adjusted estimates, unless otherwise stated.

Other house price statistics

Currently there are a number of different sources of house price statistics published in addition to the ONS HPI. There will be differences in the data published by each source as there are differences in both the data and methodology used. Therefore the ONS HPI is not directly comparable with these other indicators. Further details on the differences between official house price statistics can be found in the article Official House Price Statistics Explained (974.4 Kb Pdf)
.

Land Registry house price index

All residential property transactions in England and Wales are recorded by Land Registry. These transactions are used for calculating the Land Registry index. This index is based on repeat-sales regression, which calculates the change in price of any property transacted twice since 1995. Therefore new build properties are excluded from the index. Land Registry publishes indices at a sub-regional level. The Land Registry HPI is normally published on the 20th working day of every month, and refers to all transactions of the preceding month.

Registers of Scotland records all the property transactions in Scotland. It produces average house prices based on arithmetic means of these transactions, which is published as the quarterly housing market statistics in the second month after the month to which the figures refer to.

Northern Ireland residential property price index

The Land and Property Services assisted by the Northern Ireland Statistics and Research Agency (NISRA) publish a quarterly residential property prices index (RPPI) for Northern Ireland. The index measures change in the price of residential property sales recorded by Her Majesty's Revenue and Customs. This is a new official statistic, first published in quarter 1 of 2012.

Halifax house price index and Nationwide house price index

Both Halifax and Nationwide produce house price indices based on their own mortgage approvals only and therefore, like the ONS HPI, will not include any cash transactions. They both have UK-wide coverage, and since the Halifax and Nationwide use only their own in-house data they can process them immediately and do not have to await the receipt of data from other lenders. This means that they are more timely than the ONS HPI.

LSL Acadata house price index

The LSL Acadata (previously the LSL Property Services/Acadametrics) HPI is the only house price index to reflect all transactions, as opposed to data samples, and provides mix and seasonally adjusted results at national, regional and county or unitary district or London borough levels.

This bulletin includes the March 2015 data. Future publication dates for this statistical bulletin are available via the release calendar.

General

Details of the policy governing the release of new data are available from the Media Relations Office. Also available is a list of the names of those given pre-release access to the contents of this release.